TEMPLATE DO NOT SEND TO NFA NATIONAL FUTURES ASSOCIATION by ericaburns

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									              TEMPLATE: DO NOT SEND TO NFA
NATIONAL FUTURES ASSOCIATION

FIRM APPLICATION
Instructions for Using the Firm Application Template
READ THESE INSTRUCTIONS CAREFULLY BEFORE COMPLETING OR REVIEWING THE APPLICATION.
THE FAILURE TO ANSWER ALL QUESTIONS COMPLETELY AND ACCURATELY OR THE OMISSION OF
REQUIRED INFORMATION MAY RESULT IN THE DENIAL OR REVOCATION OF REGISTRATION.

This document is not an application form. Do not send this document to NFA. It is a template that you
may use to assist in filing the electronic application.

You may fill out the template online and save and/or print it when you are finished or you can download
the template and/or print it and fill it out later.

Not every section applies to every applicant. Certain sections apply depending on the registration cat-
egory or categories being applied for. The text above these sections explains who must complete the
section. In the electronic application, only the applicable sections will appear.

DEFINED TERMS

Words that are underlined in this form are defined terms and have the meanings contained in the Defini-
tion of Terms section.

GENERAL

Read the Instructions and Questions Carefully

A question that is answered incorrectly because it was misread or misinterpreted can result in severe
consequences, including denial or revocation of registration. Although this applies to all questions in the
application, it is particularly important to the questions in the Disciplinary Information Section.

Rely Only on Advice from NFA Staff

A question that is answered incorrectly because of advice received from a lawyer, employer, a judge
or anyone else (other than a member of NFA’s Registration, Compliance, Legal or Information Center
(“RCLI”) departments) can result in severe consequences, including denial or revocation of registration.
This also applies to all questions in the form, but is particularly important regarding the Disciplinary Infor-
mation Section. If the language of a question in the Disciplinary Information Section requires disclosure
of a matter, a “Yes” answer to the question is required no matter what other advice has been received
from anyone other than NFA’s RCLI staff. Additionally, the applicant or registrant remains responsible for
failures to disclose even if someone completes the form on the applicant’s or registrant’s behalf.

Update the Information on the Application

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              TEMPLATE: DO NOT SEND TO NFA
NATIONAL FUTURES ASSOCIATION

FIRM APPLICATION
Instructions for Using the Firm Application Template
If information provided on the application changes or a matter that would have required disclosure on
the application occurs after the application is filed, the new information must be promptly filed. APs and
Principals should advise their Sponsors of the new information, and the Sponsor must file the update
on their behalf. The failure to promptly update information can result in severe consequences, including
denial or revocation of registration.

Compliance with Disclosure Requirements of Another Regulatory Body is not Sufficient

With some exceptions, which are described below in the Regulatory and Financial Questions sections,
if any question requires the provision of information, that information must be provided. In particular, if
a question in the Disciplinary Information Section requires disclosure of a matter, the question must be
answered “Yes” and additional documents must be provided even if the matter has been disclosed to an-
other regulatory body such as FINRA, an exchange or a state regulator. Similarly, disclosure is required
even if another regulatory body does NOT require disclosure of the same matter.

Call NFA with Questions

If there is any question about whether particular information must be provided, whether a particular mat-
ter must be disclosed or whether a particular question requires a “Yes” answer, call the NFA Information
Center at (312) 781-1410. Representatives are available from 8:00 a.m. to 5:00 p.m., Central Time, Monday
through Friday. If the advice of NFA staff is sought, a written record containing the date of the conversa-
tion, the name of the NFA staff person giving the advice and a description of the advice should be made
during the conversation and kept in the event an issue concerning disclosure of the matter arises later.

DISCIPLINARY INFORMATION SECTION

Criminal Questions

Some common mistakes in answering the criminal disclosure questions involve expungements, diversion
programs and similar processes. The Commodity Futures Trading Commission requires a “Yes” answer
even if the matter has been expunged or the records sealed, there was no adjudication or finding of guilt,
the guilty plea was vacated or set aside or the matter was dismissed upon completion of the diversion
program.

Another common error regarding criminal matters concerns matters that do not involve the futures in-
dustry. All criminal matters must be disclosed, even if a matter is unrelated to the futures industry, unless
the case was decided in a juvenile court or under a Youth Offender law.

Regulatory Questions

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              TEMPLATE: DO NOT SEND TO NFA
NATIONAL FUTURES ASSOCIATION

FIRM APPLICATION
Instructions for Using the Firm Application Template
Regulatory actions taken by the Commodity Futures Trading Commission, NFA or domestic futures ex-
changes do not need to be disclosed since NFA is already aware of them once they are entered into
NFA’s BASIC system.

Financial Questions

It is not necessary to disclose arbitration or CFTC reparations matters unless the applicant or registrant
has failed to pay an award issued in a futures-related arbitration or an order entered in a reparations
matter.

Only adversary actions that a bankruptcy trustee or a trustee’s attorney files must be disclosed. Adver-
sary actions that creditors file are not disclosable. A person named as a party to an adversary action in a
bankruptcy proceeding must disclose the action, even if the person is not the bankrupt person.

ADDITIONAL DOCUMENTS

For any matter that caused a “Yes” answer, a written explanation detailing the events and conduct must
be provided. That explanation can be entered on the Matter pages by giving it a name, e.g., the docket
number of the case, and describing it in the text box. Alternatively, the explanation can be sent in hard
copy format to NFA.

In addition to the required explanation, other documents about the matter must be sent to NFA. If court
documents are unavailable, a letter from the court verifying that must be sent to NFA. If documents other
than court documents are unavailable, the person must provide a written explanation for their unavail-
ability.

Like answering the questions correctly, providing all documents to NFA is important. Failure to do so will
delay the registration process and may result in a denial of the application.

DEFINITION OF TERMS (The following terms are defined solely for the purpose of using NFA’s Online
Registration System.)

10% OR MORE INTEREST: direct or indirect ownership of 10% or more of an applicant’s or registrant’s stock; enti-
tlement to vote or empowered to sell 10% or more of an applicant’s or registrant’s voting securities; contribution of
10% or more of an applicant’s or registrant’s capital; or entitlement to 10% or more of an applicant’s or registrant’s
net profits.
ADJUDICATION: in a criminal case, a determination by the court that the defendant is guilty or not guilty.
ADVERSARY ACTION: a lawsuit arising in or related to a bankruptcy case commenced by a creditor or bankruptcy
trustee by filing a complaint with the bankruptcy court.
ALIAS: another name utilized by an individual or previously used by an entity.
CHARGE: a formal complaint, information, indictment or equivalent instrument containing an accusation of a crime.
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              TEMPLATE: DO NOT SEND TO NFA
NATIONAL FUTURES ASSOCIATION

FIRM APPLICATION
Instructions for Using the Firm Application Template
DBA: abbreviation for Doing Business As. The firm is doing business under this name.
ENJOINED: subject to an injunction.
ENTITY: any person other than an individual.
FELONY: any crime classified as a felony and for states and countries that do not differentiate between a felony
or misdemeanor, an offense punishable by a sentence of at least one year imprisonment and/or a fine of at least
$1,000. The term also includes a general court martial.
FINANCIAL SERVICES INDUSTRY: the commodities, securities, accounting, banking, finance, insurance, law or
real estate industries.
FOUND: subject to a determination that conduct or a rule violation has occurred. The term applies to dispositions
of any type, including but not limited to consent decrees or settlements in which the findings are neither admitted
nor denied or in which the findings are for settlement or record purposes only.
INTERNAL REVENUE CODE:
Section 7203: Willful Failure to File Return, Supply Information or Pay Tax
Section 7204: Fraudulent Statement or Failure to Make Statement
Section 7205: Fraudulent Withholding Exemption Certificate or Failure to Supply Information
Section 7207: Fraudulent Returns, Statements or Other Documents
INVESTMENT RELATED STATUTES:
          • The Commodity Exchange Act
          • The Securities Act of 1933
          • The Securities Exchange Act of 1934
          • The Public Utility Holding Company Act of 1935
          • The Trust Indenture Act of 1939
          • The Investment Advisers Act of 1940
          • The Investment Company Act of 1940
          • The Securities Investors Protection Act of 1970
          • The Foreign Corrupt Practices Act of 1977
          • Chapter 96 of Title 18 of the United States Code
          • Any similar statute of a State or foreign jurisdiction
          • Any rule, regulation or order under any such statutes; and
          • The rules of the Municipal Securities Rulemaking Board
MISDEMEANOR: any crime classified as a misdemeanor and for states and countries that do not differentiate
between a felony or misdemeanor, an offense punishable by a sentence of less than one year imprisonment and/or
a fine of less than $1,000. The term also includes a special court martial.
PERSON: an individual, association, partnership, corporation, limited liability company, limited liability partnership,
trust, or other form of business organization.
PRINCIPAL: an individual who is:
• a sole proprietor of a sole proprietorship; or
• a general partner of a partnership; or
• a director, president, chief executive officer, chief operating officer or chief financial officer of a corpora-
tion, limited liability company or limited partnership; or
• in charge of a business unit, division or function of a corporation, limited liability company or limited partner-
ship if the unit, division or function is subject to regulation by the Commission; or
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              TEMPLATE: DO NOT SEND TO NFA
NATIONAL FUTURES ASSOCIATION

FIRM APPLICATION
Instructions for Using the Firm Application Template
• a manager, managing member or a member vested with the management authority for a limited liability company
or limited liability partnership; or
• an individual who directly or indirectly, through agreement, holding companies, nominees, trusts or other-
wise:
         - is the owner of 10% or more of the outstanding shares of any class of a registrant’s stock; or
         - is entitled to vote 10% or more of any class of a registrant’s voting securities; or
         - has the power to sell or direct the sale of 10% or more of any class of a registrant’s voting securities; or
         - has contributed 10% or more of a registrant’s capital; or
         - is entitled to receive 10% or more of a registrant’s net profits; or
         - has the power to exercise a controlling influence over a registrant’s activities that are subject to
         regulation by the Commission; or
an entity that:
         - is a general partner of a registrant; or
         - is the direct owner of 10% or more of any class of a registrant’s securities; or
         - has directly contributed 10% or more of a registrant’s capital unless such capital contribution consists of
         subordinated debt contributed by:
                   ♦ an unaffiliated bank insured by the Federal Deposit Insurance Corporation; or

                   ♦ a United States branch or agency of an unaffiliated foreign bank that is licensed under the

                     laws of the United States and regulated, supervised and examined by United States government
                     authorities having regulatory responsibility for such financial institutions; or
                   ♦ an insurance company subject to regulation by any State.

SELF-REGULATORY ORGANIZATION (SRO): a private, non-governmental organization authorized to set and en-
force standards or conduct for an industry. NFA, FINRA (formerly known as NASD) and the securities and futures
exchanges in the U.S. are examples of domestic SROs.
UNITED STATES CRIMINAL CODE:
Section 152:       Concealment of assets, making false claims or bribery in connection with a bankruptcy
Section 1341,
1342 or 1343: Mail fraud
Chapter 25:        Counterfeiting and forgery
Chapter 47:        Fraud or false statements in a matter within the jurisdiction of a United States department or
                   agency
Chapter 95
or 96:             Racketeering and Racketeering Influence

Principals
Firm applicants must file electronic applications for each individual who is a principal of the applicant, including
the sole proprietor of a sole proprietorship. A firm must have at least one individual principal affiliated with it in
order to obtain registration. NFA Members must have at least one individual principal who is also registered as an
AP of the firm or a floor broker.

Additional Assistance
Additional information regarding registration requirements and specific topics can be found on the Registration
page of NFA’s web site at www.nfa.futures.org. NFA’s Information Center, (800-621-3570 or 312-781-1410), is also
available to provide assistance. It’s normal hours are Monday through Friday, from 8:00 AM to 5:00 PM CT.

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